**3. Definition of green financing, green banking, and green business**

The green financing concept is an invention of green growth movement and green growth links to green economy; the origin of green economy is found in sustainable development concept. Until now there is no widely accepted definition of green financing; however, the definition given by the German Development Institute is considered as a recognized one—"Green finance comprise financing of (including preparatory cost and capital cost) green investments, financing of public green policies and green financial system." What Dr. Nannette's definition elucidates is the areas of green investments—climate change adaptation, energy efficiency, renewable energies, and other climate change mitigation, for example, reforestation. The components of financial system have made it clear that it should deal specifically with green investments, such as the Green Climate Fund or financial instruments for green investments (e.g., green bonds and structured green funds), as well as their detailed legal, economic, and institutional framework conditions [3]. According to the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), "Green Finance is a strategic approach to incorporate the financial sector in the transformation process towards low-carbon and resource-efficient economies, and in the context of adaptation to climate change" [4]. Green financing is an idea that is more comprehensive than green banking, and banks are one of the most

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green business.

**4. Importance of green banking**

related to green banking.

*Green Banking*

*DOI: http://dx.doi.org/10.5772/intechopen.93294*

significant basis of funding for green projects.

important sources of financing; however, nonbank financial organizations are also a

Nevertheless, the concept of green banking had substituted banks' motive to "planet, people, and profit" from "profit, profit, and profit." Green banking is also known as environmental banking; in broad perception, green banking practices eco-friendly methods and encourages its patrons to reduce the carbon footprint by their banking procedures [5]. According to Bangladesh central bank—"Green banking is a component of the global initiatives by a group of stakeholders to save environment" [6]; the sustainable banking concept is the outcome of the society and environment-oriented banking practices. Recently, Bangladesh Bank has integrated "sustainability" into core banking practices through green banking, corporate social responsibility, and financial inclusion. Green banking is a category of banking practices considering all the social and ecological factors with an aim to defend the environment and preserve natural resources. It is also called as ethical banking or sustainable banking [7]. Saruti Garg stated that green banking is a shade that symbolizes practices and policies which help banks to be environmentally, economically, and socially responsible. Banks should conduct their operation in suitable manner and in suitable areas to reduce both external carbon emission and internal carbon footprint [8]. Consequently, business that took green financing from bank and other sources to involve in environmentally friendly business is considered as green business. According to Smith and Friend, "green businesses" are businesses and practices that are viewed as naturally detailed, used living and natural products to generate factories and supervision to protect against releases, and utilized eco-friendly materials [9, 10]. Earlier, Zsolnai explains in 2002 that business that ponders over the thought of ecology in undertaking numerous tasks of business is called green business [11]. Gilbert again classified that green businesses are those businesses which can interchange activity in a method so that either it ensures natural benefit or its activities limit negative ecological effect [12]. A business that uses lesser natural resources to accomplish the duties requires and utilizes sustainable methods and materials such as producing sustainable products as raw materials (recycled, plant-based or organically grown) and recycling (paper, plastic, electronics, glass, and aluminum) which is known by Morebusiness.com as

Banks are very important financial intermediaries to collect money from surplus

units to disburse money to deficit units. Banks by its financing activities help economy to move on. Therefore, to face the reality of achieving SDGs, banks should involve in green banking. The central banks' role here is imperative. Policy and guideline creation and enforcement of that can ensure the successful implementation of green financing by banks. Out of 17 SDGs, goal No. 7 affordable and clean energy; goal No. 9 industry, innovation, and infrastructure; goal No. 11 sustainable cities and communities; goal No. 12 responsible consumption and production; and goal No. 13 climate actions are goals with successful implementation of those are

Since 1987 to achieve sustainable development, many new movements have been introduced; few of those were green economy, green growth, low-carbon

**5. Impacts of green banking to create green businesses**

#### *Green Banking DOI: http://dx.doi.org/10.5772/intechopen.93294*

*Banking and Finance*

sums up the chapter.

**2. Methodologies**

reports published by Bangladesh Bank, etc.

reduced dependency on paper, increased online banking, and environmental risk rating before granting financing to a borrower are few features of green banking which do not contradict with Maqasid Shariah rather meet the objectives of Shariah. This chapter is divided into various sections for easy representation of the detail of green banking: the second section is going to discuss about the methodology used to gather data, the third section explains what is green banking, the fourth section represents the importance of it, the fifth section elaborates the impact of it to introduce green business, the sixth section demonstrates the link among green banking, Islamic banking, Maqasid Shariah, and SDGs, and finally, the conclusion

This chapter has used secondary data. The data is gathered following desk research method, and the data is analyzed following document analysis technique. Document analysis is a methodical process of revising or appraising documents—both published and electronic (computer-based and Internettransmitted) material. Like other systematic approaches in qualitative research, document analysis wants that data to be scrutinized and deduced to stimulate meaning, gain empathetic, and advance pragmatic knowledge [2]. Documents used for systematic evaluation may be a variety of forms. They include advertisements, agendas, attendance registers, and minutes of meetings, manuals, background papers, books and brochures, diaries and journals, event programs (i.e., printed outlines), letters and memoranda, maps and charts, newspapers (clippings/articles), press releases, program proposals, application forms, and summaries, radio and television program scripts, organizational or institutional reports, survey data, and various public records. The current chapter especially searched websites, articles related to green banking, Maqasid Shariah, SDGs, used published or working paper of various recognized institutions, green banking

**3. Definition of green financing, green banking, and green business**

The green financing concept is an invention of green growth movement and green growth links to green economy; the origin of green economy is found in sustainable development concept. Until now there is no widely accepted definition of green financing; however, the definition given by the German Development Institute is considered as a recognized one—"Green finance comprise financing of (including preparatory cost and capital cost) green investments, financing of public green policies and green financial system." What Dr. Nannette's definition elucidates is the areas of green investments—climate change adaptation, energy efficiency, renewable energies, and other climate change mitigation, for example, reforestation. The components of financial system have made it clear that it should deal specifically with green investments, such as the Green Climate Fund or financial instruments for green investments (e.g., green bonds and structured green funds), as well as their detailed legal, economic, and institutional framework conditions [3]. According to the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), "Green Finance is a strategic approach to incorporate the financial sector in the transformation process towards low-carbon and resource-efficient economies, and in the context of adaptation to climate change" [4]. Green financing is an idea that is more comprehensive than green banking, and banks are one of the most

**92**

important sources of financing; however, nonbank financial organizations are also a significant basis of funding for green projects.

Nevertheless, the concept of green banking had substituted banks' motive to "planet, people, and profit" from "profit, profit, and profit." Green banking is also known as environmental banking; in broad perception, green banking practices eco-friendly methods and encourages its patrons to reduce the carbon footprint by their banking procedures [5]. According to Bangladesh central bank—"Green banking is a component of the global initiatives by a group of stakeholders to save environment" [6]; the sustainable banking concept is the outcome of the society and environment-oriented banking practices. Recently, Bangladesh Bank has integrated "sustainability" into core banking practices through green banking, corporate social responsibility, and financial inclusion. Green banking is a category of banking practices considering all the social and ecological factors with an aim to defend the environment and preserve natural resources. It is also called as ethical banking or sustainable banking [7]. Saruti Garg stated that green banking is a shade that symbolizes practices and policies which help banks to be environmentally, economically, and socially responsible. Banks should conduct their operation in suitable manner and in suitable areas to reduce both external carbon emission and internal carbon footprint [8]. Consequently, business that took green financing from bank and other sources to involve in environmentally friendly business is considered as green business. According to Smith and Friend, "green businesses" are businesses and practices that are viewed as naturally detailed, used living and natural products to generate factories and supervision to protect against releases, and utilized eco-friendly materials [9, 10]. Earlier, Zsolnai explains in 2002 that business that ponders over the thought of ecology in undertaking numerous tasks of business is called green business [11]. Gilbert again classified that green businesses are those businesses which can interchange activity in a method so that either it ensures natural benefit or its activities limit negative ecological effect [12]. A business that uses lesser natural resources to accomplish the duties requires and utilizes sustainable methods and materials such as producing sustainable products as raw materials (recycled, plant-based or organically grown) and recycling (paper, plastic, electronics, glass, and aluminum) which is known by Morebusiness.com as green business.
